Jul

16

Growth Report – Monday, July 16 2018

INFLATION NEARS 3%
The federal government’s Consumer Price Index rose 2.9% across the 12 months ending in June, a level of annualized inflation last seen in February 2012. Yearly inflation has now increased for five straight months (although the headline CPI went north only 0.1% last month). The core CPI, which removes food and fuel costs, rose 0.2% in June, bringing its 12-month gain to 2.3%. Over the past 12 months, the cost of fuel oil climbed 30.8%; the cost of gasoline, 24.3%. Feeling the effect of those advances, the Producer Price Index rose 3.4% in the year ending in June.1,2

UNIVERSITY OF Michigan CONSUMER SENTIMENT GAUGE DECLINES
At a mark of 97.1, the preliminary July edition of this consumer sentiment index came in 1.1 points underneath its final June reading. Still, it was close to its average reading over the past year (97.7). One year ago, the index stood at 93.4. Thirty-eight percent of consumers felt tariffs would negatively affect the economy, an increase from 21% in June and 15% in May.3

GOLD FALLS TO A 12-MONTH LOW
With a strengthening dollar providing a stiff headwind for the metals market, it was unsurprising that the key precious and base metals (gold, silver, copper, palladium, platinum) all retreated last week. Gold suffered the least, declining 1.2% to a Friday settlement of $1,241.20, its lowest COMEX close since July 17, 2017.4

DOW CLIMBS BACK ABOVE 25,000
Finishing Friday’s trading session at 25,019.41, the blue chips rose 2.30% for the week, and outperformed the Nasdaq Composite and the S&P 500 over five days. The Nasdaq gained 1.79% to close out the week at 7,825.98, while the S&P advanced 1.50% to end the week at 2,801.31.5

T I P  O F  T H E  W E E K

There are multiple reasons why you should avoid taking a loan from your workplace retirement plan. One excellent argument against this move: you will deprive the funds you borrow of compounding power.

THIS WEEK
Earnings take center stage: Bank of America, BlackRock, J.B. Hunt, and Netflix lead the way on Monday, when investors will also consider June retail sales figures. | Federal Reserve chair Jerome Powell begins two days of testimony before Congress on monetary policy on Tuesday; on the earnings front, Charles Schwab, Comerica, CSX, Fidelity National, Goldman Sachs, Johnson & Johnson, and UnitedHealth all announce. | Wednesday, earnings news rolls in from Abbott Labs, Alcoa, American Express, eBay, Grainger, IBM, Morgan Stanley, Northern Trust, Novartis, and U.S. Bancorp, and complementing all this, analysts consider June housing starts and building permits and a new Fed Beige Book. | On Thursday, BoNY Mellon, BB&T, Blackstone Group, Capital One, Celanese, Cintas, Dominos, E*TRADE, Fifth Third, GATX, KeyCorp, Microsoft, Nucor, Philip Morris, Snap-On, Sonoco, Travelers Companies, Unilever, and Union Pacific present earnings, and a new initial jobless claims report arrives. | Friday, earnings appear from Baker Hughes, General Electric, Honeywell International, Manpower, Regions Financial, Schlumberger, Stanley Black & Decker, State Street, and SunTrust Bank.

Q U O T E O F T H E W E E K

“Always aim at complete harmony of thought and word and deed.”
MAHATMA GANDHI

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

1.21

16.08

12.36

12.63

NASDAQ

13.36

24.73

23.48

25.37

S&P 500

4.78

14.44

13.35

12.81

REAL YIELD

7/13 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.72

0.58

0.55

1.43

Sources: wsj.com, bigcharts.com, treasury.gov – 7/13/185,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

T H E W E E K L Y R I D D L E

How many times can you subtract 100 from 1,000?

LAST WEEK’S RIDDLE: Regina is about to meet her cousin Lydia for the first time. Regina has no idea what she looks like. She arrives at Lydia’s house at night. The door opens, and she sees a mail carrier, a UPS driver, and a police officer watching television. She immediately hugs Lydia. How does she know which one of the three is her cousin?
ANSWER: Two of the three are men.

CITATIONS:
1 – tradingeconomics.com/united-states/inflation-cpi [7/12/18]
2 – investing.com/economic-calendar/ [7/13/18]
3 – sca.isr.umich.edu/ [7/13/18]
4 – marketwatch.com/story/gold-retreats-on-track-for-lowest-settlement-in-a-nearly-a-year-2018-07-13 [7/13/18]
5 – markets.wsj.com/us [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/13/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/13/18]

This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Cities served but not limited to are: Park City, Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.

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About the Author ()

Mark K. Lund is the firm's founder, CEO and author of The Effective Investor, a #1 Best Seller. He has written articles for or been quoted in: The Wall Street Journal, The Salt Lake Tribune, The Enterprise Newspaper, The Utah Business Connect Magazine, US News & World Report, and Newsmax.com, just to name a few.  Mark publishes two newsletters called, “The Mark Lund Growth Report” and “Mark Lund on Money.”  Mark provides CPE (continuing professional education) courses for CPAs.  You may also have seen him on KUTV Channel 2, or as a guest speaker at a local association or business. Mark provides investment and retirement planning services for individuals and 401(k) consulting for small businesses. In his book, The Effective Investor, Mark exposes the false narrative magazines, media, big Wall Street firms, and most advisors want you to believe. The good news is that Mark will show you that you don’t need their speculative ways of investing in order to be successful. Get a free copy when you schedule your initial consultation.

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